In one of the biggest literary upsets for some years, a previously low-rated novel last night scooped the £30,000 Orange prize for fiction.

After a hard-fought final round, judges gave the women-only award to Andrea Levy's Small Island, a comedy about the punctured illusions, tribulations and spry adaptability of the pioneer Windrush generation of immigrants to Britain in the early 1950s.

Levy, daughter of West Indian-born Londoners, a seasoned writer in her mid-40s, came out an unexpected top of the strongest shortlist of any recent literary award, including the Booker prize.

Sandi Toksvig, head of the five judges, said one character in the story was "a wonderful comic creation".

Levy beat two veteran bestselling novelists, Rose Tremain and Margaret Atwood, a blockbuster on Stalinist Russia by Gillian Slovo, and a highly regarded first novel about growing up by the young Nigerian author Chimamanda Ngozi Adichie.

The sixth author on the shortlist was the American Shirley Hazzard, whose The Great Fire is a wartime love story told with a glow and sense of place. But Atwood and Slovo were considered the strongest contenders.

Against such opposition, some commentators and book trade specialists found Small Island overfamiliar in theme and lacklustre in narrative. It attracted virtually no bets at Ladbroke's. Odds set by the bookmaker's book specialist Warren Lush made it a 7-1 outsider.

Oryx and Crake, Atwood's sci-fi fable about genetic engineering, and The Colour, Tremain's story of 19th century immigration to New Zealand, were his joint favourites at 2-1, with Slovo third at 5-1 and Adichie at 6-1.

"Oh, heck. That's come as a complete shock to me", said Mr Lush, who rallied quickly when told the result last night. "We hardly took a penny on it. Quite good news for bookmakers. We never really mind outsiders winning."

One clue to Small Island's chances was that, with a striking cover but little other fanfare from its publishers, it had begun to make friends among readers since it was published in February. It has sold 2,200 copies in hardback, comfortably more than Hazzard, Slovo's The Ice Road, or Adichie's Purple Hibiscus.

Last night Suzi Doore, fiction buyer for Waterstone's, said: "Andrea Levy is a wonderful writer who really deserves a huge readership. This prize is fantastic news as it will bring her work to the attention of a lot more readers."

Ms Toksvig said: "I didn't follow the bookies' odds or what the commentators were saying. We were adamant at the judges' meeting that we would forget the authors, and think only of the text. There is this wonderful comic creation called Gilbert in Small Island."

Small Island is told by the voices of Gilbert, his wife Hortense, who comes to Britain to join him after his RAF service, their white landlady Queenie, who has a secret and close previous connection with the West Indies, and her husband.

Levy's parents were lured to Britain because the war gave them a larger sense of the world, she said in an interview with the London Evening Standard. "Besides, they didn't have the money to go back."

Her parents, who had four children, were the only black family on a council estate near the Arsenal football ground.

After being awarded the prize, Levy said: "Funnily enough, I don't get tearful, but I've just had my own Halle Berry moment."

Accepting the award, she said: "It's sod's law. I've left my speech in my handbag. Not many people get to go beyond their wildest dreams, and I've just arrived."